MRPL - Q4FY13 Result Update - Nirmal Bang

- MRPL reported net loss of Rs619mn compared to our estimated net profit of Rs2,516mn on account of: (1) Lower complexity of refinery despite higher distillate yield and (2) Higher tax outflow as company did not recognize deferred tax assets.

- After including other extra-ordinary income of Rs444mn from NMPT and adjusting for the applicable tax rate adjusted net profit would be Rs13.5mn.

- We maintain our Buy rating with price target of Rs69 to reflect: Likely boost in earnings post phase III expansion from October 2013, (2) Nelson complexity improving to ~10 from existing level of 5.5, (3) GRM likely to touch US$7/bbl in FY15 once all secondary units start processing, (4) Stock pricing in all uncertainty related to the Iran souring and export price parity and (5) Risk of EPP being lowest among PSU refiners with export contribution touching ~50%.

Source : Equity Bulls

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